Case Study I-2 Voip2.Biz, Inc.: Deciding on the Next Steps for a Voip Supplier
CASE STUDY I-2 VoIP2.biz, Inc.: Deciding on the Next Steps for a VoIP Supplier
Lawrence R. Milkowski, President and CEO of VoIP2.biz, Inc., an Indianapolis-based start-up supplier of Voice over Internet Protocol (VoIP) telephony to the small and midsize business market, knew he had a difficult job ahead of him. It was Friday, June 23, 2006, and he had to prepare his recommendations on the next steps for his fledgling company to the board of directors at its meeting on Tuesday, June 27, 2006. While Larry was a firm believer in the direction of the company, he knew that the board was anxious to resolve the future of the firm given the slower-than-hoped-for progress in getting the company’s cash flow to break even.
2.
The Company
In 2006, VoIP2.biz considered itself a systems integrator that worked with business customers to help them move their voice communications from legacy technology to VoIP technology. Through these activities, VoIP2.biz would become its clients’ telephone company, thus earning a recurring revenue stream. Management’s plan was to continue to gain dominance in the Indianapolis market, expand the company’s business activities throughout Indiana, and then open additional sales offices throughout the Midwest, gaining a first mover position in the marketplaces they served. Management believed that success in this strategy would make them an attractive acquisition target in the 2009 to 2010 timeframe. Management thought that VoIP2.biz’s business opportunity came from the recognition of five basic marketplace facts experienced by business customers with less than 400 voice telephone lines: 1. These businesses had often invested in separate voice networks, data networks, and Internet access technology 5.
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Copyright © 2007 by Daniel W. DeHayes. This case was prepared by Daniel W. DeHayes and Stephen R. Nelson. It is intended to support classroom discussion rather than to illustrate either effective or ineffective management
Lawrence R. Milkowski, President and CEO of VoIP2.biz, Inc., an Indianapolis-based start-up supplier of Voice over Internet Protocol (VoIP) telephony to the small and midsize business market, knew he had a difficult job ahead of him. It was Friday, June 23, 2006, and he had to prepare his recommendations on the next steps for his fledgling company to the board of directors at its meeting on Tuesday, June 27, 2006. While Larry was a firm believer in the direction of the company, he knew that the board was anxious to resolve the future of the firm given the slower-than-hoped-for progress in getting the company’s cash flow to break even.
2.
The Company
In 2006, VoIP2.biz considered itself a systems integrator that worked with business customers to help them move their voice communications from legacy technology to VoIP technology. Through these activities, VoIP2.biz would become its clients’ telephone company, thus earning a recurring revenue stream. Management’s plan was to continue to gain dominance in the Indianapolis market, expand the company’s business activities throughout Indiana, and then open additional sales offices throughout the Midwest, gaining a first mover position in the marketplaces they served. Management believed that success in this strategy would make them an attractive acquisition target in the 2009 to 2010 timeframe. Management thought that VoIP2.biz’s business opportunity came from the recognition of five basic marketplace facts experienced by business customers with less than 400 voice telephone lines: 1. These businesses had often invested in separate voice networks, data networks, and Internet access technology 5.
3.
4.
Copyright © 2007 by Daniel W. DeHayes. This case was prepared by Daniel W. DeHayes and Stephen R. Nelson. It is intended to support classroom discussion rather than to illustrate either effective or ineffective management